HKCEE ECONOMICS | 3.2 Price floor | P.

1. 1992/II/24
If the government imposes a price floor below the equilibrium price, there will be
A. a decrease in the sales revenue
B. a decrease in the quantity transacted
C. an excess supply
D. no excess demand

2. 1993/II/27
Filipino maids working as domestic helpers in Hong Kong receive a minimum wage. They usually have to
wait for a long time before obtaining employment in Hong Kong. They would have a shorter waiting time and
more employment opportunities in Hong Kong if
A. their minimum wage was raised
B. the minimum wage legislation was removed
C. the Philippine was more political unstable
D. a surcharge was imposed on the Hong Kong employers

3. 1998/II/4
If a price floor is set below the equilibrium price of good X,
A. a shortage of good X will occur.
B. the quantity transacted will decrease.
C. the total revenue may increase or decrease, depending on the elasticity of demand for good X.
D. the total revenue will remain unchanged.

4. 1999/II/6
Unit price ($) Quantity Demanded (units) Quantity Supplied (units)
7 8 20
6 12 18
5 16 16
4 20 14
3 24 12
Refer to the above supply and demand schedule for good X. The government sets its minimum price at $4 per
unit. What would happen if the government raised the minimum price to $6 per unit?
A. The shortage of good X would disappear.
B. The quantity transacted would increase.
C. Consumer expenditure on good X would decrease.
D. The surplus of good X would decrease.

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5. 2000/II/6
Hong Kong’s recent economic recession has caused a decline in people ’s income. In view of this, the government
decided to lower the effective minimum wage level of Filipino maids. As a result of these TWO changes,
(1) the demand for Filipino maids should decrease.
(2) the quantity supplied of Filipino maids should decrease.
(3) the excess supply of Filipino maids should decrease.
(4) the total expenditure on the employment of Filipino maids should drop.
A. (1) and (2) only B. (2) and (3) only C. (1), (2) and (3) only D. (1), (3) and (4) only

6. 2004/II/12

Refer to the above diagram. Which of the following statements is correct?

A. If a price ceiling is set at P1, the quantity transacted is Q3.
B. If a price floor is set at P1, the quantity transacted is Q2.
C. If a price floor is set at P3, the quantity transacted is Q2.
D. If a price ceiling is set at P3, non-price competition will occur.

7. 2007/II/7
An imposition of a minimum wage legislation would increase
A. the employment opportunities of unskilled workers
B. the total wage payment to unskilled workers
C. the unemployment of unskilled workers
D. the inflow of foreign investment

8. 2008/II/12
The government raises the effective minimum wage of imported workers,
A. the employment of imported workers will increase
B. the problem of shortage of imported workers will become more serious
C. the unemployment rate of local workers will increase
D. the total wage earnings of local workers will increase

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